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Etsy Shoppers Can Now Pay in Installments: Impact on Sellers

Etsy Shoppers Can Now Pay in Installments: Impact on Sellers

Etsy announced shoppers can now pay in installments thanks to a third-party service called Klarna. Etsy explained how it impacts sellers in today’s announcement, “We’ll send all of your funds for orders made with Klarna to your payment account the same way we do for other payment methods on Etsy.”

While many sellers gave the move a thumbs up, some sellers wanted reassurance. The following comment includes questions sellers had after reading the announcement: “Do we get paid in full right away or have to wait for split funds? And when do we supposed have to ship the item, like usual or wait when everything gets paid?”

But, as Etsy had written, “Shoppers get more flexibility, but you don’t have to wait longer for your funds.”

Another concern centered around returns. “How will refunds (or partial refunds) work if the customer is paying in instalments,” a seller asked – “Is there any difference to the process from a shopowner point of view?” But since the Etsy seller received the full funds, they simply issue a refund as they normally would.

In a FAQ on the help page set up for shoppers, Etsy explained how refunds are handled from the buyer point of view:

“Etsy shops determine their own refund and cancellation policies. If a seller issues you a refund, Klarna will receive that information and issue you the correct portion of the refund.”

Etsy is offering Klarna as an option for orders between $50 and $10,000 – after any discounts, and before shipping and taxes.

When shoppers place an order between $50 and $250 using Klarna at Checkout, they pay with Klarna in 4 interest-free installments. “With this option, you’ll pay the first installment via Klarna when checking out on Etsy. For the remaining three installments, you’ll pay every two weeks, until you’ve paid a total of four times. You won’t be charged interest or fees when paying on time.”

For orders totaling between $250.01 and $10,000, shoppers pay on a monthly payment schedule (Klarna determines the schedule, which could be 6, 12, 18, 24, or 36 months).

Shoppers should understand that they will pay interest fees if they are late with their payments – see this Klarna help page for more information.

Currently Etsy is only offering Klarna as an option in checkout in the US, but it said it would expand the offering to more countries next year.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

5 thoughts on “Etsy Shoppers Can Now Pay in Installments: Impact on Sellers”

    1. believe me quite a lot. Examples – vintage diamond jewelry, some original beautiful paintings by very talented artists which people are readily buying, wooden furniture…etc.

  1. @COVID-19. There are hundreds of thousands of items with price points upwards of $250 on Etsy. I assume that’s what you meant when asking about their “worth”. Are you familiar with the platform? You should check it out. Lots of cool stuff.

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